Q4. Some fund managers are trading the dividend difference among the component stocks in S&P500 index. 1) Please discuss how it works in the financial markets. 2) Given the following information, if the trading strategy's profit is $2,000, what should be the dividend yield for the high-dividend portfolio? (Assume all the rates are continuously compounded.) Annualized dividend yield Return in 6 months 10% 10% Portfolio H SPX CORR(H, XPX)= Initial Value (X) 1,000,000 1,000,000 ? Maturity 6 months 6 months Interest rate 1.5% 1.5% 1.95% 1 Notation: H is the high-dividend portfolio: SPX is the S&P500 portfolio: CORR is correlation. Q4. Some fund managers are trading the dividend difference among the component stocks in S&P500 index. 1) Please discuss how it works in the financial markets. 2) Given the following information, if the trading strategy's profit is $2,000, what should be the dividend yield for the high-dividend portfolio? (Assume all the rates are continuously compounded.) Annualized dividend yield Return in 6 months 10% 10% Portfolio H SPX CORR(H, XPX)= Initial Value (X) 1,000,000 1,000,000 ? Maturity 6 months 6 months Interest rate 1.5% 1.5% 1.95% 1 Notation: H is the high-dividend portfolio: SPX is the S&P500 portfolio: CORR is correlation